On Tuesday, there was an alleged glitch at the New York Stock Exchange (NYSE). The technical issue prevented the opening auctions of several stocks. There was a widespread halt of trading, confusion about the filling of orders at correct prices and more. There were swings in prices of blue-chip stocks. The U.S. Securities and Exchange Commission said that it would review the issue.
The Intercontinental Exchange, which owns the NYSE said that a “system glitch” had prevented auctions on some of its listed shares from opening Tuesday morning. As these shares traded without an opening impression, the result was erroneous prices. The exchange said that these prices would be declared null and void and the resulting trades would be canceled.
The exchange released a spreadsheet that showed 251 stocks were affected. Some of the blue-chip ones included the following:
Nike
3M
ExxonMobil
Wells Fargo
Verizon
McDonald’s and
Walmart.
On the condition of anonymity, a person from a large brokerage firm said that although the cost of the failure remained unclear, it would probably be in an eight-figure range.
The SEC is considering the routing of most orders to retail shares through auctions, in order to get better prices for individual investors. The auction glitch has come at this time, indicating that the process might be more complicated than envisaged, as things can go wrong, as proved on Tuesday.
There have been major crashes in the market in 1987 called Black Monday and 2010 called the Flash Crash. These have been followed by smaller crashes that were contained at the earliest. However, the Tuesday technical glitch can be considered as a major outage.
The SEC has confirmed that it is reviewing the issue at the New York Stock Exchange. Experts believe that the failure might have cost brokers and traders several million dollars.
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